Behind the scenes at Toyota's R&D center - Part I

As promised earlier in our case study on portfolio management, here are some insights into R&D management at Toyota.  As we had discussed in the past, Toyota has suffered quite a few setbacks this year and the fact that a lot these problems are because of increased complexity.  Toyota has been working hard to reverse some of the bad publicity it has received and recently invited some journalists to see what changes they are making to address the quality problems and may be drive up sales.  Autoblog was one of them and has two articles detailing their visit to Toyota (Deep-Dive: Behind the scenes at Toyota's R&D center, Part 1 — Autoblog, Deep-Dive: Behind the scenes at Toyota's R&D center, Part Two — Autoblog).

In an effort to show transparency and a concerted effort to improve its quality and safety, for the first time in its history, Toyota has invited a small group of journalists and analysts into its research and safety facilities in Toyota City, Japan. As part of that select group of media, in the coming days, we'll have a chance to peek behind the curtain, look at how its products are developed and tested and talk to Toyota executives, including CEO Akio Toyoda as we try to fully understand not only how things went so horribly wrong, but how the automaker plans to get back on track.

Lets dig into the article and see if we can explore about R&D management processes at Toyota and learn something about R&D management in general.
Overall, Toyota says it is going to increase quality control checks and train its engineers more.

For the most part, Toyota will continue creating cars and technology in the same manner it has in the past. However, the two major areas that will change include an expansion of the testing use cases beyond current methodologies and improvements in the training and development of its staff.

First of all, the chart below gives an idea about the magnitude of the R&D management challenge. To get a complex system like a cutting edge car get to market and compete successfully, Toyota has to fulfill multiple roles: Understand customer preferences, design cars that functionally and visually satisfy customer needs, work with part suppliers, develop cutting-edge new technology, mature technology, integrate in-house technology with supplier parts and test those systems.  Add to this complexity a diversity of locations, cultures and associated politics (Japan vs. US) and you see that this is not an easy management task by far.

Toyota's R&D Organization (via Autoblog)

The overall process architecture is also somewhat intuitive - a chief engineer is assigned for each product milestone and he becomes the communication bridge between marketing, research, advanced development (components and subsystems) and the product development team.  It might be a PowerPoint artifact, but notice somewhat late involvement of production engineering - appears they are not using concurrent engineering processes or co-design for that matter.

All of this is overseen by a chief engineer for every project or vehicle. The job of the chief engineer is to oversee everything related to a project, taking inputs from product management, marketing and advanced engineering, then sending it on to the functional groups in their organization. Every automaker has their own version of this chief engineer, with a variety of titles. At General Motors, this would be the vehicle line executive, at Ford, it's the chief nameplate engineer and the title at Honda is large project leader. Whatever the title, the end result is that this individual has ultimate responsibility for the end product.

The product development process is in stages with increased level of maturity.  There is requirements analysis, hardware design and software design at each stage.  Followed by a testing / evaluation process.

To a large degree, much of Toyota's product development process isn't really any different from what we have seen at other automakers. At its most basic level, it consists of three central phases, starting with requirements analysis. At the beginning of a project, whether it's a new car or a just a new technology, the engineers determine what the product ultimately needs to do and how it should perform. Based on those requirements, a set of detailed specifications are produced. 

Product Development Process at Toyota (Via Autoblog)

It is a bit interesting that all the testing happens at the end of each phase as opposed to some form of concurrent engineering (may be the PowerPoint is just for illustration).  

Tomorrow, we will look at the changes Toyota is proposing to the R&D management process and discuss if they will make a difference.